Source: Blog – Alliance for American Manufacturing

The Boston skyline at sunset. Photo by lgh75 via Flickr

If enacted, the bill will extend Buy America preferences to cities and towns for new buildings and renovations.

Buy America preferences are common sense: Americans’ tax dollars should be reinvested in American jobs, companies and communities, full stop. Why send that money overseas when there are workers and businesses right in our own backyard ready to do the same job at a fair price?

Buy America counteracts the gross incentives that encourage the purchase of cheap imports, which are often heavily subsidized by foreign governments or priced low because of human rights abuses or environmental disregard within the supply chain.

Right now, Massachusetts has the chance to dramatically extend Buy America rules by requiring cities and towns to give preference to U.S. manufacturers when buying steel, iron and other materials for new buildings and renovations. These rules would apply toward all public projects exceeding $500,000. Similar rules are already in place in a variety of forms in over 21 different states, while 38 states provide preference for in-state manufacturers. Buy America also has been on the books federally for decades.

State Sen. Joan Lovely (D-Salem), the chief sponsor of the bill, told reporter Christian Wade that every time a taxpayer-funded contract goes to a foreign country, it means “nobody is spending money here. Their workers are pouring that money back into their economy, and we’re on the losing side.”

Scott Paul, president of the Alliance for American Manufacturing, noted that Buy America is “smart policy that supports middle class jobs and strengthens both manufacturing and our local communities.”

Naturally, we agree wholeheartedly with our boss on this one, and strongly support passage of this legislation. It’d be good for American manufacturers as a whole, good for the U.S. economy, good for supporting jobs in Massachusetts, and will ensure that we construct public projects with goods made to the highest labor and environmental standards — our own.

Despite what some critics might say, Buy America rules save money on projects and help to grow the economy. According to an economic analysis by the Steel Fabricators of New England, adopting the Buy America rules as written in Massachusetts would save about $15 million per year, largely due to increases in economic productivity. They also found that for every $1 spent on domestic fabricated steel, about $1.50 is generated in economic activity.

That means if Massachusetts cities and towns spend $100 million of taxpayer money on public works in a year, if all of that money is spent on domestically produced goods, it returns $150 million in economic activity — through job creation, increased profits for local businesses, and new tax revenue from increased productivity.

Moreover, Americans also benefit from secure supply chains that are rooted domestically rather than internationally. As the supply chain shortages of the COVID-19 pandemic have made clear, we cannot always rely on imports in a time of crisis, and when it comes to vital public projects, we would be foolish to jeopardize them by relying on foreign inputs.

Thus, Buy America rules are the textbook definition of what we call a win-win.

By contrast, should that $100 million be spent on foreign goods, almost nothing is returned domestically and the tax dollars spent ultimately do nothing to contribute to the people who are paying those taxes in the first place. Jobs may be lost as companies struggle to fill orders, which means less money for Americans that trickles down into every sector of the economy and causes major damage. All the while, those foreign companies are laughing their way to the bank at the expense of American taxpayers.

The people of Massachusetts have a choice between the former and the later scenario, and to us, it is crystal clear which decision they can make. Several states have expanded their own Buy America preferences this year, including Texas, New Jersey and New York. Massaschusetts should join them.

As Paul said, “policymakers must maximize ways to ensure that taxpayer money is reinvested right back into the workers and businesses that make their products in Massachusetts and the United States.”

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